equity release by moving into caravan

lisyloo

Nope, it's a valid point about the subject.
I don't know whether the limits are, but I guess it's not in the interests of these companies to get involved with low valued properties because they simply don't make enough money out of it.

I am negative about them because I saw how little my parents would have got out of it.
Fortunately they changed their mind and went for downsizing.

Another issue was that the contract stated limits for external and internal painting (I think every 5 years).
For elderly people (some of whom are diabled) then it may be difficult for them to do this themselves and they don't want to be spending their hard earned released equity on painters.
I understand that the basic idea was that they didn't want to house to be neglected but the contractual obligations were quite harsh IMO.

(and I'm not implying that ALL OAPs can't do DIY :-)

margaretclare

I'm sure all the comments were well intentioned.

Shall we get back to helping the OP??

I have not criticised you or anyone else.

Some of the comments I made have been from experience - having done equity release, having looked at several other options, having learned a bit from my time with CAB and having learned from reading in other places. And am still in process of maximising retirement income (thanks, Ed!)

End of conversation.

Margaret Clare

lisyloo

Some of the comments I made have been from experience - having done equity release, having looked at several other options, having learned a bit from my time with CAB and having learned from reading in other places

Your valuable knowledge is much appreciated (I hope that doesn't sound sarcastic - it's not meant to).

Dora_the_Explorer_5

alanjk wrote:

It has been suggested we should sell up and move into a static caravan. What thoughts do you have about this? what would be the average outgoings? Are there any alternatives?
Any help would be much appreciated.

Why not rent a caravan/mobile home/holiday home for a couple of weeks in September and October to get some idea of what it would feel like?
Costs for a permanent move to a 'van' : You may find the heat/light bills the same, or perhaps even more, than your current ones as although they're insulated they're still pretty difficult to keep warm when the weather's bad. Ground rent is payable on top of council tax and there may be a charge for water - these can add up. There may be 3/4 weeks accommodation elsewhere if the site closes to be factored in.There's is also a problem with rain during the night - they don't leak, but the noise is horrendous. Most vans are centrally heated with a calor fire in the living area, if you or your wife are 'chesty' or asthmatic you may be unable to tolerate this form of heating.
As you are retiring, the things you need to be aware of are how to get to the supermarket/shops/doctors by public transport - you may have a car now but that might not always be the case and bus companies can change their routes/cut routes out. Will the site allow access ramps to be installed if
either of you develop mobility problems.
If I were in your shoes, I'd go for releasing equity - good info on Age Concern website and also Norwich Union and a couple of other mortgage providers. But that's because I wouldn't want to be living in a 'van' when I'm 90 and on my own (fingers crossed).
Good luck.

margaretclare

lisyloo wrote:

Another issue was that the contract stated limits for external and internal painting (I think every 5 years).
For elderly people (some of whom are disabled) then it may be difficult for them to do this themselves and they don't want to be spending their hard earned released equity on painters.
I understand that the basic idea was that they didn't want to house to be neglected but the contractual obligations were quite harsh IMO.

Lisyloo, was this when your parents were considering equity release?

We did this 3 years ago and we've had no such stipulations laid on us.

I wouldn't want it to be specified how often we paint/don't paint! Or how we keep the garden, or any other such stipulation. We do these things as and when WE think they need it!

If the OP wants to go down the equity release route I can put him in touch with the IFA who set it up for us - researched the market and came out with the best deal at the time, although, as Ed says, there may be better deals coming along.

We're quite happy with what we did. We didn't need extra income only we didn't want to continue paying a mortgage until we're 83. We'd looked at several other options but there were reasons against every one of them. I even thought of moving to northern France, but DH 'can't get his head around' the language! Nor we worried about leaving a large inheritance behind us to our family. But as I said before, everyone will have different circumstances, wishes and expectations, and at this stage of life it's important to do a lot of thinking and to get it right.

Margaret Clare

lisyloo

Lisyloo, was this when your parents were considering equity release?

Yes it was about 3-4 years ago.

We did this 3 years ago and we've had no such stipulations laid on us.

Different company?
Different type of scheme?
I'm not saying it will apply in all cases, just something to watch out for.
The basic idea is that because the property is their investment they don't want people letting the place fall into dis-repair. For this reason they won't take on 100% of a property, they always leave the owner with an interest in it. All the same, the timescales were fairly harsh. I am sure no-one would come round and check, but they are still legal obligations. I would be suprised if there is nothing at all in your contract.

I wouldn't want it to be specified how often we paint/don't paint! Or how we keep the garden, or any other such stipulation. We do these things as and when WE think they need it!

Ah but if it's someone else's investment then they have an interest in it being kept in a good state of repair. When I bought my first home it was an "shared equity" scheme with the builder. We had similar clauses to make sure we kept the property in a good state of repair. I don't think this would be uncommon when someone has an interest in the property although it might take a different form from specific intervals for painting. There might just be a general statement that it's your responsibility to maintain the property in a good state of repair. I would be suprised if someone has an interest in your property but has not stated anything about keeping it in good repair in your contract.

For my parents their decision was coupled with mobility problems.
They needed a flat anyway and some company.
So an "OAP" block of flats suited them.
Often I think it's not only driven by financial needs.
The flat has met their mobility needs as well as providing lower costs, company and a warden if they need it.

As you say I think the decision often has to meet several needs.
Social, wellbeing, health etc. as well as merely financial.

margaretclare

Lisyloo, there's a statement that the property should be kept in good repair, but then there has been something to that effect in every mortgage I've ever had! As you say, someone else - the bank, the building society, the local authority (when there were such things as local authority mortgages!) - has an interest in the property. No one has ever stated it must be painted every 5 years or whatever.

We also have mobility problems, which was why this bungalow suits us. I originally moved here with my late first husband who'd had strokes. Yes, I agree it is a 'lifestyle' choice, not only to do with money, and I've emphasised the need to think seriously, discuss, and make the right choices.

We have young couples on either side of us and we prefer living among all age-groups. Living totally among older people would not suit us. It obviously does suit some people, your parents included. The park homes we looked at are very much a 'retired community'.

The OP hasn't been back, but I would like to know more about the 'caravan' that was proposed. Was it really a caravan - the kind you tow behind a car, or a park home? As Dora says, there's a lot to think about.

Margaret Clare

lisyloo

No one has ever stated it must be painted every 5 years or whatever.

Perhaps it's only this one particular scheme, but there were definitely timescales for both internal and external painting.
It's one of the things that made them/us reconsider (and they are really glad they did).

I can't remember who it was with now I'm afraid as it was a number of years ago.

EdInvestor

For this reason they won't take on 100% of a property, they always leave the owner with an interest in it.

It sounds as though this may be a "home reversion" plan which is a different way of releasing cash from the equity release plan that Margaret has. Hers is a lifetime mortgage, where the interest rolls up and is set against the value of the property at the borrower's death or departure for nuring care, when the home is sold and the loan paid off, remainder to the deceased's estate.

With the home reversion, you sell the company a percentage stake in the home, retaining ownership of the rest of it. At the homeowner's death the home is sold and the proceeds split between the deceased's estate and the company which bought part of the home earlier.

margaretclare

Hi Ed

Yes, I've just read through the mortgage documents and it's true that there's a clause headed Maintenance of the Property: You must properly maintain the property and keep it in good order and repair. Nothing more specific than that.

There has been this type of wording in every mortgage I've ever had, and this is no exception.

We're not painting this year - we're having the roof replaced!!! 75-year old asbestos tiles are slipping and cracking, and because of the type of tiles, there are extra costs involved in disposal. But any house requires regular maintenance no matter who owns it.

We did look at the home reversion plans, and wouldn't touch them with the proverbial. Ours is no different from any other mortgage except that we don't pay it off until the second of us dies or we no longer need it, for whatever reason.

The OP might be too young to do what we did - one of us had to be 68 and then we were allowed to release 25% of the equity.

Margaret Clare